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Senate passes HR 4302; what it means to SNFs

March 31, 2014
by Lois A. Bowers, Senior Editor
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Update: The Senate passed H.R. 4302 the evening of March 31, and the president signed it into law April 1. Read more about the act as well as reactions from LeadingAge and the American Health Care Association here.

The U.S. Senate today is considering a bill (PDF) that would delay enforcement of the “two midnight rule” for certain hospital stays as well as create value-based purchasing and readmission reduction programs for skilled nursing facilities (SNFs).

H.R. 4302, also known as the Protecting Access to Medicare Act of 2014, was passed in the U.S. House of Representatives March 26, and its provisions related to the sustainable growth rate and the one-year delay of ICD-10 implementation garnered much media attention last week. For those in long-term care, however, Sections 111 and 215 may hold the most interest.

Section 111 involves the current requirement of a three-day inpatient hospital stay in order for Medicare beneficiaries to be eligible for Medicare coverage of Part A skilled nursing care benefits. Organizations such as the American Health Care Association/National Center for Assisted Living previously have expressed concern (PDF) that Medicare beneficiaries’ access to SNF care is being “constrained” by hospitals’ increasing practice of keeping patients in observation status rather than admitting them as inpatients.

H.R. 4302 would bar Medicare recovery audit contractors from auditing hospitals’ claims under the two midnight rule through March 31, 2015, “unless there is evidence of systematic gaming, fraud, abuse, or delays in the provision of care by a provider of services.” The Centers for Medicare & Medicaid Services had intended the rule to go into effect in October 2013 but subsequently delayed enforcement to March 31, 2014, and then Sept. 30, 2014.

Section 215 would create a SNF program aimed at lowering readmission rates and would pay incentives to SNFs meeting the program's goals.

This section calls for the U.S. Department of Health and Human Services (HHS) to introduce an “all-cause all-condition hospital readmission measure” for SNFs by Oct. 1, 2015, and a resource use “measure to reflect an all-condition risk-adjusted potentially preventable hospital readmission rate” for SNFs by Oct. 1, 2016. SNF performance would be reported publicly on the Nursing Home Compare website, but HHS also would be required to send quarterly reports to SNFs with confidential feedback on their performance against the measures beginning Oct. 1, 2016.

“We have been supportive of public reporting and hope that the [HHS] secretary will incorporate input from consumers and stakeholders to ensure that such measures are not only valid but are understandable and usable by consumers,” LeadingAge Senior Vice President of Public Policy and Advocacy Cheryl Phillips, MD, wrote on the organization’s website.

A value-based purchasing program would make incentive payments to SNFs for services provided on or after Oct. 1, 2018. The program at first would tie payments to SNF performance on the to-be-established readmission measure, but later it would tie them to the to-be-established resource use measure.

“LeadingAge has long-supported efforts to develop and implement value-based purchasing for SNFs,” Phillips said. Advancing Excellence is an “excellent resource” for providers seeking to implement quality improvement measures to reduce unnecessary hospital admissions, she added.

Related article: H.R. 4302: ACHA, LeadingAge express mixed feelings